Consider the proposal to add a playground with swing sets and slides etc. to a disused corner of an existing park. A contractor has submitted a bid for all direct costs associated with construction, and the city has studied the expenses required for ongoing maintenance. 

What other information is required to determine whether building the playground is efficient? What are the practical difficulties of obtaining that information and how might we attempt to overcome these difficulties? 

Are public goods capitalized in housing prices? Provide a detailed explanation of the research strategy employed by Sandra Black in her research, as well as a summary of her findings. (Black’s article “Do Better Schools Matter? 

Parental Valuation of Elementary Education.” Quarterly Journal of Economics, 114, 577-99 is available on blackboard.)